Millennials spend three times more of their income on housing than their grandparents, but are more likely to live in overcrowded spaces and face longer commutes.
Photograph: Joe Giddens/PA

Millennials are spending three times more of their income on housing than their grandparents yet are often living in worse accommodation, says a study launched by former Conservative minister David Willetts that warns of a “housing catastrophe”.

The generation currently aged 18-36 are typically spending over a third of their post-tax income on rent or about 12% on mortgages, compared with 5%-10% of income spent by their grandparents in the 1960s and 1970s. Despite spending more, young people today are more likely to live in overcrowded and smaller spaces, and face longer journeys to work – commuting for the equivalent of three days a year more than their parents.

The research by Willetts’ intergenerational commission at the Resolution Foundation thinktank also reveals that today’s 30-year-olds are only half as likely to own their own home as their baby boomer parents. They are four times as likely to rent privately than two generations ago, a sector which has the worst record for housing quality, the report claims.

The report’s authors argue that the housing crisis is a huge part of public anxiety about the country’s direction, a factor in the result of the EU referendum last year and in the general election in June.

A young family today has to save for 19 years on average to afford a typical deposit compared with three years for the previous generation, the report states.

“This is the biggest problem facing the younger generation,” said Willetts. “It depresses their living standards and quality of life. It is very important for the Tory party to open up the route to home ownership again. A lot of twentysomethings also have horror stories of bad landlords and we need to help them as well.”

By highlighting intergenerational inequality, Willetts hopes to break down public opposition to mass housebuilding – not least from parents who despair at the difficulty their children face in finding good housing. He is arguing for a new towns programme in which the government buys land that does not have planning consent to create large new communities of homes for sale.

The report came as the communities secretary, Sajid Javid, also announced a wholesale review of social housing policy in the wake of the fatal fire at Grenfell Tower, a 24-storey block in north Kensington which combined council housing and a small number of private rented homes.

Speaking to the National Housing Federation conference in Birmingham, Javid said: “In one of the richest, most privileged corners of the UK – the world, even – would a fire like this have happened in a privately owned block of luxury flats? If you believe that the answer is no, even if you think it was simply less likely, then it’s clear that we need a fundamental rethink of social housing in this country.”

He said a social housing green paper would propose reforms to the overall quality of social homes, the rights of tenants and will address what can be done to ensure their complaints are taken seriously and dealt with properly.

Grenfell residents claim they raised concerns about fire safety at the block on several occasions but were not heeded. The Resolution Foundation report found that almost a third of 25-to-34-year-olds living in private rented flats live in properties which fail the decent homes standard.

Responding to the Resolution Foundation report, Dan Wilson Craw, director of campaign group Generation Rent, said: “Young adults have been hit with a double whammy of rising house prices which make ownership unaffordable, and rising rents which they cannot escape. The chorus of demands on the government to act decisively is getting louder, but it’s important not to neglect the growing numbers of older renters. Because getting a mortgage becomes harder beyond the age of 40, many face a lifetime of renting.

“Millions of people, young and old, are stuck renting for the foreseeable future and they need much greater security than the market currently provides, with protection from eviction and rising rents.”